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Trading Diary
August 29, 2002

These extracts from my daily trading diary are intended to illustrate the techniques used in short-term trading and should not be interpreted as investment advice. Full terms and conditions can be found at Terms of Use .






USA
The Dow closed down slightly at 8670 on normal volume. The secondary rally is still intact, while the primary cycle is in a down-trend.  

The Nasdaq Composite came close to forming a key reversal, rising 1.6% to close at 1335, on an outside day. The secondary rally is still intact. The primary cycle is in a down-trend.

The S&P 500 closed unchanged at 917. The primary trend is down. The doji signals uncertainty.

The Chartcraft NYSE Bullish % Indicator  bull alert signal is at 46% (August 28).


Sun spots
Sun Microsystems warn that technology spending is weakening and first-quarter revenues will be at the low end of the previous guidance. (more)

Phillips-Conoco merger
Phillips Petroleum appears likely to win FTC approval for its $US 24.5 billion merger with Conoco. (more)

Dow 5000?
Technician Bernie Schaeffer believes that the Dow is inflated and will fall further. (more)



ASX Australia
The All Ordinaries fell sharply at the opening before climbing steadily through the day to close down 7 points at 3083 on normal volume. The primary trend is down. The point and figure chart below shows support at 3040 (the actual peak was 3047).
The Stochastic (20,3,3) is below its signal line. Twiggs money flow signals distribution.




Suncorp-Metway [SUN]
The allfinanz group reported a 21% drop in earnings despite strong operating performance. (more)
SUN is forming a stage 3 top in the form of a symmetrical triangle, while relative strength (price ratio: xao) declines.



MACD and Twiggs money flow are positive.




Lion Nathan  [LNN]
The brewer is in a stage 2 up-trend and recently broke out above an ascending triangle. Twiggs money flow and MACD show bullish divergences.



CSL [CSL]
 CSL is in a steep stage 4 down-trend, depicted by the 150-day moving average. Relative strength (price ratio: xao) is falling, while MACD is negative and Twiggs money flow signals distribution.







Conclusion

Short-term: Avoid new entries. Slow Stochastic and MACD are on opposite sides of their respective signal lines.
Medium-term: Wait for the All Ords to signal a reversal.
Long-term: Wait for a bull-trend on the Nasdaq or S&P 500 (primary cycle).

Colin Twiggs


Thought for the Day:

 Reading Market Wizards by Jack Schwager, there is a recurring theme: 
almost every successful trader fails dramatically before they accumulate the wisdom necessary to succeed.






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Colin Twiggs

Author: Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.

He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.